Advance-Decline Line

The Advance-Decline Line (AD Line) is a technical indicator used in stock market analysis to measure the number of stocks that have advanced or declined in a given period. It is calculated by subtracting the number of stocks that have declined from the number of stocks that have advanced. The AD Line is used to measure the overall direction of the stock market and to identify potential market tops and bottoms. It is also used to identify divergences between the stock market and other indicators, such as the Dow Jones Industrial Average (DJIA).

History of the Advance-Decline Line

The Advance-Decline Line was developed by Charles Dow, one of the founders of Dow Jones & Company. He first introduced the concept in his book, The Dow Theory, which was published in 1897. The AD Line was designed to measure the overall direction of the stock market and to identify potential market tops and bottoms. It is still used today by technical analysts to measure the strength of the stock market.

Comparison of Advance-Decline Line with Other Indicators

Summary

The Advance-Decline Line is a technical indicator used in stock market analysis to measure the number of stocks that have advanced or declined in a given period. It is calculated by subtracting the number of stocks that have declined from the number of stocks that have advanced. The AD Line is used to measure the overall direction of the stock market and to identify potential market tops and bottoms. For more information about the Advance-Decline Line, you can visit websites such as Investopedia, The Balance, and StockCharts.com.

See Also

• Dow Theory
• Dow Jones Industrial Average (DJIA)
• Technical Analysis
• Market Breadth
• Relative Strength Index (RSI)
• Moving Average Convergence Divergence (MACD)
• On-Balance Volume (OBV)
• Price-Volume Trend (PVT)
• Accumulation/Distribution Line (ADL)
• Money Flow Index (MFI)

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